Question 1

The cash flow on total assets ratio is computed by dividing ________ by ________.

Accepted Answer

The answer of The cash flow on total assets ratio...

Question 2

Investments that are readily convertible to a known amount of cash and are sufficiently close to their maturity so that the market value is unaffected by interest rate changes are ________.

Accepted Answer

The answer of Investments that are readily convertible to a...

Question 3

The purchase of long-term assets by issuing a note payable for the entire amount is reported on the statement of cash flows in the:

Accepted Answer

A)  Operating activities. 
B)  Financing activities. 
C)  Investing activities. 
D)  Schedule of noncash financing and investing activities. 
E)  Reconciliation of cash balance.

Question 4

Describe the format of the statement of cash flows,including the reporting of significant noncash investing and financing activities.

Accepted Answer

The answer of Describe the format of the statement of...

Question 5

Northington,Inc.is preparing the company's statement of cash flows for the fiscal year just ended.Using the following information,determine the amount of cash flows from operating activities using the indirect method:
$\begin{array}{|l|r|}
\hline \text { Net income } & \$ 182,000 \
\hline \text { Gain on the sale of equipment } & 12,300 \
\hline \text { Proceeds from the sale of equipment } & 92,300 \
\hline \text { Depreciation expense }- \text { equipment } & 50,000 \
\hline \text { Payment of bonds at maturity } & 100,000 \
\hline \text { Purchase of land } & 200,000 \
\hline \text { Issuance of common stock } & 300,000 \
\hline \text { Increase in merchandise inventory } & 35,400 \
\hline \text { Decrease in accounts receivable } & 28,800 \
\hline \text { Increase in accounts payable } & 23,700 \
\hline \text { Payment of cash dividends } & 32,000\
\hline
\end{array}$

Accepted Answer

A)  $332,200. 
B)  $236,800. 
C)  $261,400. 
D)  $186,800. 
E)  $189,400.

Question 6

Information to prepare the statement of cash flows usually comes from three sources: (1)________, (2)________,and (3)________.

Accepted Answer

The answer of Information to prepare the statement of cash...

Question 7

A company reported average total assets of $501,000 in Year 1 and $611,000 in Year 2.Its net operating cash flow in Year 1 was $41,500 and $55,250 in Year 2.Calculate its cash flow on total assets ratio for both years.Comment on the results.

Accepted Answer

The answer of A company reported average total assets of...

Question 8

Cash flows from selling trading securities are usually reported in the statement of cash flows as part of:

Accepted Answer

A)  Operating activities. 
B)  Financing activities. 
C)  Investing activities. 
D)  Noncash activities. 
E)  This is not reported in the statement of cash flows.

Question 9

Probably the most important section of the statement of cash flows in analyzing the financial performance of a company's ongoing business is the ________ section.

Accepted Answer

The answer of Probably the most important section of the...

Question 10

Accounting standards require companies to include a statement of cash flows in a complete set of financial statements.

Accepted Answer

A) True 
 B)False

Question 11

Use the information provided below to calculate the cash paid for interest for the period.
 $\begin{array}{|l|c|}
\hline \text { Interest payable, beginning-year }& \$ 4,200 \
\hline \text { Interest expense. } & 26,700 \
\hline \text { Interest payable, year-end. } & 3,000 \
\hline\text { Cash paid for interest }\
\hline
\end{array}$

Accepted Answer

The answer of Use the information provided below to calculate...

Question 12

Use the following calendar-year information to prepare Adam Company's statement of cash flows using the direct method.
 $$\begin{array} { | l | r | } 
\hline \text { Cash paid to purchase machinery } & \$ 124,000 \
\hline \text { Cash paid for merchandise inventory } & 220,000 \
\hline \text { Cash paid for operating expenses } & 280,000 \
\hline \text { Cash paid for interest } &4,000 \
\hline \text { Cash received for interest } & 10,000 \
\hline \text { Cash proceeds from sale of land } &100,000 \
\hline \text { Cash balance at beginning of year } & 15,000 \
\hline \text { Cash balance at end of year } &  77,000\
\hline \text { Cash borrowed on a short-term note } & 25,000 \
\hline \text { Cash dividends paid } & 24,000  \
\hline \text { Cash received from stock issuance } &57,000 \
\hline \text { Cash collections from customers } & 522,000 \
\hline
\end{array}$$

Accepted Answer

The answer of Use the following calendar-year information to prepare...

Question 13

For each of the following items, indicate whether it would be classified as either an (O) operating activity, an (I) investing activity, a (F) financial activity, or a significant (N) noncash financing and investing activity.
-Purchased supplies for cash.

Accepted Answer

A) O 
B) N 
C) I 
D) F

Question 14

When preparing the operating activities section of the statement of cash flows using the indirect method,non-operating losses are added to net income.

Accepted Answer

A) True 
 B)False

Question 15

Cash paid for merchandise is an operating activity.

Accepted Answer

A) True 
 B)False

Question 16

Use the following information to calculate cash paid for wages and salaries:
$$\begin{array} { | l | r | } 
\hline \text { Salaries expense } & \$ 168,000 \
\hline \text { Salaries payable, January 1 } & 6,400 \
\hline \text { Salaries payable, December 31 } & 10,600 \
\hline
\end{array}$$

Accepted Answer

A)  $157,400. 
B)  $163,800. 
C)  $168,000. 
D)  $172,200. 
E)  $174,400.

Question 17

Fernwood Company is preparing the company's statement of cash flows for the fiscal year just ended.The following information is available:
$$\begin{array} { l c } 
\text { Retained earnings balance at the beginning of the year } & \$ 233,000 \
\text { Cash dividends declared for the year } & 50,000 \
\text { Proceeds from the sale of equipment } & 85,000 \
\text { Gain on the sale of equipment } & 4,500 \
\text { Cash dividends payble at the beginning of the year } & 22,000 \
\text { Cash dividends payable at the end of the year } & 30,000 \
\text { Net income for the year } & 110,000
\end{array}$$
The amounc of cash paid for dividends was:

Accepted Answer

A)  $52,000. 
B)  $60,000. 
C)  $58,000. 
D)  $50,000. 
E)  $42,000.

Question 18

When analyzing the changes on a spreadsheet used to prepare a statement of cash flows,the cash flows from operating activities generally affect:

Accepted Answer

A)  Net income, current assets, and current liabilities. 
B)  Noncurrent assets. 
C)  Noncurrent liability and equity accounts. 
D)  Both noncurrent assets and noncurrent liabilities. 
E)  Equity accounts only.

Question 19

When using the indirect method to calculate and report the net cash provided or used by operating activities,net income is adjusted for all but which of the following?

Accepted Answer

A)  Gains and losses from nonoperating items. 
B)  Revenues and expenses that did not provide or use cash. 
C)  Changes in noncurrent assets and noncurrent liabilities. 
D)  Changes in current liabilities related to operating activities. 
E)  Depreciation and amortization expense.

Question 20

All of the following statements related to preparation of the statement of cash flows under U.S.GAAP and IFRS are true except:

Accepted Answer

A)  Both U.S. GAAP and IFRS permit the reporting of cash flows from operating activities using either the direct or indirect method. 
B)  IFRS permits classification of cash outflows for interest expense under operating or financing based on which one results in better cash flows from operating activities. 
C)  U.S. GAAP requires cash outflows for income tax be classified as operating activities. 
D)  IFRS permits the splitting of income tax cash flows among operating, investing, and financing depending on the sources of that tax. 
E)  IFRS permits classification of interest expense under operating or financing activities provided it is consistently applied across periods.

Exam 12: Reporting Cash Flows

The cash flow on total assets ratio is computed by dividing by .

Investments that are readily convertible to a known amount of cash and are sufficiently close to their maturity so that the market value is unaffected by interest rate changes are ________.

The purchase of long-term assets by issuing a note payable for the entire amount is reported on the statement of cash flows in the:

Describe the format of the statement of cash flows,including the reporting of significant noncash investing and financing activities.

Information to prepare the statement of cash flows usually comes from three sources: (1), (2),and (3).

A company reported average total assets of $501,000 in Year 1 and $611,000 in Year 2.Its net operating cash flow in Year 1 was $41,500 and $55,250 in Year 2.Calculate its cash flow on total assets ratio for both years.Comment on the results.

Cash flows from selling trading securities are usually reported in the statement of cash flows as part of:

Probably the most important section of the statement of cash flows in analyzing the financial performance of a company's ongoing business is the ________ section.

Accounting standards require companies to include a statement of cash flows in a complete set of financial statements.

For each of the following items, indicate whether it would be classified as either an (O) operating activity, an (I) investing activity, a (F) financial activity, or a significant (N) noncash financing and investing activity. -Purchased supplies for cash.

When preparing the operating activities section of the statement of cash flows using the indirect method,non-operating losses are added to net income.

Cash paid for merchandise is an operating activity.

Use the following information to calculate cash paid for wages and salaries: $\begin{array} { | l | r | } \hline \text { Salaries expense } & \$ 168,000 \\\hline \text { Salaries payable, January 1 } & 6,400 \\\hline \text { Salaries payable, December 31 } & 10,600 \\\hline\end{array}$

When analyzing the changes on a spreadsheet used to prepare a statement of cash flows,the cash flows from operating activities generally affect:

When using the indirect method to calculate and report the net cash provided or used by operating activities,net income is adjusted for all but which of the following?

All of the following statements related to preparation of the statement of cash flows under U.S.GAAP and IFRS are true except: